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Citizens United 2.0 and the 'Regressive Era of Money in Politics'

The Supreme Court’s ruling in Citizen’s United, which allowed unlimited corporate expenditures on political advocacy efforts, has vastly improved the fundraising abilities of groups like American Crossroads.

Campaign fundraisers are already at work on the upcoming presidential election—Obama 2012 is soliciting donations, and Republican candidates like Tim Pawlenty are spending more time meeting donors than voters.

Outside groups like Karl Rove’s American Crossroads, which spent $50 million on the recent midterm elections, are also no doubt revving up the money machine. Crossroads and similar groups with benign names like Americans for Job Security, FreedomWorks, and yes, the US Chamber of Commerce will spend hundreds of millions of dollars on the presidential race.

The Supreme Court’s ruling in Citizen’s United, which allowed unlimited corporate expenditures on political advocacy efforts, has vastly improved the fundraising abilities of groups like American Crossroads. (Karl Rove has admitted this). Corporations can funnel unlimited money into an outfit like American Crossroads, and then let it do the dirty work of conceiving, producing, and airing advertisements that bash or support a chosen candidate.

What Citizen’s United does not allow the corporation to do, however, is contribute money directly to candidates. That remained illegal—until, perhaps, now. Last week, in a decision that received scant media attention, a Reagan-appointed federal judge in Virginia ruled that campaign finance laws banning corporations from direct contributions to candidates are unconstitutional.

US District Judge James Cacheris extended the logic of Citizen’s United to reach his decision. "(F)or better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech," he wrote in his 52-page opinion. "Thus, if an individual can make direct contributions within (the law's) limits, a corporation cannot be banned from doing the same thing."

The case at hand was not driven by canny operatives in an attempt to further loosen campaign finance laws. Cacheris was presiding over a case brought by the federal government against two former officials at the Galen Capital Group, who are charged with making direct, illegal corporate contributions to Hillary Clinton’s 2006 Senate campaign and 2008 presidential campaign. The two men had their employees make donations and then reimbursing them directly.

The public defender in the case argued that "[c]orporate political speech can now be regulated, only to the same extent as the speech of individuals or other speakers… That is because Citizens United establishes that there can be no distinction between corporate and other speakers in the regulation of political speech."

This argument has been tried once before in the wake of Citizen’s United, but a Minnesota judge rejected it earlier this month. Cacheris did not.

Fred Werthemier of Democracy 21, a campaign finance group, said Cacheris went too far in defining the outer limits of Citizens United. He cited the 2003 Supreme Court decision Federal Election Commission v. Beaumont, which explicitly upheld the constitutionality of direct corporate contributions, and language in the Citizen’s United decision that makes it clear the justices were only dealing with expenditures, not direct contributions. “This leaves the Beaumont decision standing as existing Supreme Court doctrine, a decision that the district court judge conveniently ignores,” he said. Other legal experts have said they expect the decision to be overturned.

Even if the Supreme Court upholds Cacheris’ opinion, however, proponents argue the immediate impact won’t be enormous. Corporations could make direct contributions to candidates but would still have to abide by donation limits of $2,500 per candidate per election. "This finding hardly gives corporations a blank check,” Cacheris wrote in his opinion.

Perhaps not—but one possible loophole is that individuals or business concerns could create or use an unlimited number of corporations, and thus make essentially unlimited contributions directly to candidates.

It’s also dangerous for Cacheris’ ruling to become law because contribution limits might eventually be swept away by post-Citizens United logic. If donations are equal to free speech, for both corporations and individuals, can those donations then be limited? There are already cases winding their way through the courts saying no.

Beyond the immediate, pernicious effect of Citizen’s United, this is what campaign finance experts have been worried about—a slippery legal slope that would soon allow unlimited spending on everything related to democratic elections. Says People for the American Way: “[Citizens United] was just the beginning of what, without correction, may be a new regressive era of money in politics.”

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